Optical encoders (such as rotary encoder and optical scale, optical scale will be used for representing optical encoders throughout the following description) may be divided into incremental output and absolute output according to the output data type. The absolute output optical scale has the advantages of capability of reading the absolute position, no accumulation error incurred, and not losing the position information after power off. The absolute output optical scales are widely used in computerized numerical control (CNC), servo drive, robots, and devices where displacement information needs to be measured. The signal obtained by the optical scale requires an appropriate decoder to extract position information of the device under test. There is a need for a decoding device and a decoding method that can be applied to the absolute output type optical scales.